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Tesla /might/ make a valuable product with good margins from the factory. I would rate that chance as greater than 90% personally, but it still isn't certain. J
by tcoppi 10y ago
Tesla /might/ make a valuable product with good margins from the factory. I would rate that chance as greater than 90% personally, but it still isn't certain. Just like it isn't certain that Yahoo is a failed acquisition for Verizon, although you and I might rate the chance of that as quite high.
The profit of the acquirer is relevant in so far as it relates to the ability to finance massive acquisition projects such as these, and the market's willingness to do so. I'd say in both instances the market's willingness has been high, but people have good reasons to be skeptical both ways.
- mikeash 10y agoProfit and ability to finance aren't quite the same, though. So far, capital markets have been willing to give Tesla big piles of money with excellent terms (buying issued stock at a price that values the company similarly to major automakers and such) so they seem to have no trouble financing the Gigafactory. Verizon may well have access to more money, but then that just supports the first half of "more money than sense."